1. Habitat offsets are increasingly used in attempts to avoid the impacts of permitted habitat removal on biodiversity, but their ability to achieve a genuine compensatory effect is a matter of debate. Approaches to offsetting typically aim to achieve 'no net loss' of habitat over time, yet few evaluations exist of whether this outcome is feasible. 2. We investigated the potential of offsets to mitigate the impacts of habitat removal in the long term using a case study of future scenarios of habitat availability for an endangered bird, the south-eastern red-tailed black-cockatoo Calyptorhynchus banksii graptogyne. Important food resources for this species include scattered large buloke Allocasuarina luehmannii trees which are under threat of removal for agricultural intensification. We projected availability of large buloke trees over a 150-year period, initially using recent rates of decline to inform a 'business as usual' scenario, then examining alternative scenarios reflecting different offset strategies. 3. All scenarios suggested that numbers of large trees will continue to decline for at least 100 years. Because of time lags in resource maturation, offsets were unable to achieve no net loss in the medium-term, and the most plausible offset scenarios were inadequate to compensate for habitat loss at year-100, when resource availability was lowest. 4. To minimize the temporal extent and severity of this future resource bottleneck, offsets must include both replanting and protection of other large, at-risk trees, with a high ratio of protected trees to trees cleared. 5. Synthesis and applications. The success of habitat offsets in cases where there is a significant lag between habitat loss and replacement of resources for a threatened species is likely to be low, because resource bottlenecks become a significant threat to the persistence of the species. In order to identify habitat protection options that will genuinely offset habitat removal, it is essential to estimate explicitly the 'avoided loss' of habitat attributable to its protection.